From Texas, I mostly cover the energy industry and the tycoons who control it. I joined Forbes in 1999 and moved from New York to Houston in 2004. The subjects of my Forbes cover stories have included T. Boone Pickens, Harold Hamm, Aubrey McClendon, Michael Dell, Ross Perot, Exxon, Chevron, Saudi Aramco and more. Follow me on twitter @chrishelman.

Billionaire Rejected In Novel Plan To Clean Up Illinois Coal Plants

Chris Cline is willing to foot the bill to overhaul two old coal-fired power plants, as long as they agree to buy coal from his Foresight Energy.

Dynegy is in the process of acquiring five coal-fired power plants from power generator AmerenAmeren. These are old plants, so old that Ameren isn’t even asking Dynegy to pay for them. But the deal is not without its complications. The plants have not yet been retrofitted with modern pollution control systems, known as scrubbers. Adding scrubbers to the five plants would cost Dynegy upwards of $1.25 billion. So the company has asked the Illinois Pollution Control Board to grant it a 5-year waiver. Ameren had already received a scrubber waiver.

Naturally, the anti-coal Sierra Club is anti waiver and would love to see Ameren’s coal plants (and another handful across Illinois) shut down altogether.

But surprisingly another company against the waiver is Foresight Energy, Illinois’ leading coal miner, controlled by billionaire Chris Cline. A coal miner on the same side as the Sierra Club? What gives?

In testimony at the Illinois Pollution board Tuesday, Foresight CEO Michael Beyer made a novel proposal. If Dynegy didn’t want to invest its own capital to complete half-built scrubbers at the Newton and Coffeen plants, Foresight would finance the upgrades itself — to the tune of roughly $500 million. And if Dynegy doesn’t like that deal, said Beyer, Foresight would be happy to take over both plants altogether.

In a phone conversation, Beyer explained to me that his proposal made perfect sense. In return for financing the scrubber, Foresight would insist on a long-term contract to supply the Newton plant with coal from its nearby mines.

Why isn’t Illinois coal already going to Illinois power plants? It used to, before the passage of the Clean Air Act in 1992. But Illinois coal is high in sulfur content, so after the Act those power generators like Ameren abandoned it in favor of low-sulfur coal mined in the Powder River Basin of Wyoming.

“Our coal miners come out of the mine and can see smokestacks, but we’re not selling coal to them because they’ve not been retrofitted with scrubbers to burn high-sulfur coal mined in Illinois,” says Beyer. What’s bizarre, he says, is that “we sell more coal to Europe, India and China than to our neighbors in Illinois.”

Because the Wyoming coal burns clean enough, plants like Newton never got upgraded with scrubber technology. Add the scrubbers, however, and the plant would be able to burn that dirty Illinois coal yet have cleaner emissions than it does now.

Even better, Illinois residents would end up with cheaper electricity as a result. Foresight’s Illinois coal production costs of about $22 per ton are believed to be cheaper (on an energy equivalency basis) than any other coal mined in the United States, and transporting it would cost a fraction of getting coal from Wyoming.

“Our low costs will enable us to be profitable in any part of the commodity cycle,” says Beyer. “We are the low cost producer. Our heat content is higher and we have a transportation cost advantage.”

Dynegy, late Wednesday, rejected Foresight’s overture; spokesperson Katy Sullivan explained that the plan was not operationally or economically feasible in part because those plants already have long-term contracts to buy Wyoming coal and because the half-built scrubbing systems at those plants were not designed for the highers sulfur content of Foresight’s coal. What’s more, says Dynegy, a small-scale test of Illinois coal earlier this year “resulted in costly equipment failures.”

Beyer says that any technical hurdles can surely be overcome given that the Newton plant used to burn Illinois coal. It underwent a $30 million conversion to burn Wyoming coal in 1999.

Even if it can’t find some common ground with Dynegy, Foresight’s interest in acquiring its own coal-fired generation is now known, and may fine other takers among the dozens of coal plants operated by struggling generators across the northeast.

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Not only that, but they did. Kashiwazaki-Kariwa was only a slightly newer design for half the reactors but survived a quake far more powerful (due to distance), and even Daini survived relatively unscathed despite receiving the same impact, simply due to renovations and more modern design of the backup systems. In the case of Daini, even when the primary system failed the secondary and tertiary systems worked just fine. Fukushima 1-1 to 1-3 are among the oldest reactor cores in the system, developed on technology now fifty years old, which was already obsolete by the time they finished construction.

——–” A fact sheet from the anti-nuclear advocacy group Nuclear Information and Resource Service contends that the Mark I design has design problems, and that in 1972 an Atomic Energy Commission member, Dr. Stephen Hanuaer, recommended that this type of system be discontinued.”———–

Over 40 years and still in use…………….

————-” But aside from the generation of reactor design, the following 23 U.S. plants have GE boiling-water reactors (GE models 2, 3 or 4) with the same Mark I containment design used at Fukushima, according to the NRC’s online database:

High-sulfur coal has a nasty habit of also including more heavy metals. While scrubbers work fairly well (until they fail), you will likely still see increases in mercury and arsenic releases into the atmosphere, causing great harm to local populations. Coal plants need as much water as nuclear plants to function, and are far dirtier while running properly than an average nuclear accident. There is no reason to support coal miners in the US, it’s second only to the tobacco industry in direct harm to the population.

I happen to live in Japan, downwind from a nuclear plant. As an engineer who studied under some of the leading clean coal researchers (and a few nuclear fuels engineers), I would rather see nuclear plants operating than coal in any type. Since you can’t get rid of coal overnight though, high sulfur coal is simply worse for the environment than low-sulfur type, and there’s a reason why there has been a soft-ban on high-sulfur coal use.

Clean air and water are immeasurably important, and I’ve always been against the use of coal because it has always been so dirty, but this article gives me hope that there may yet be a solution to some of our problems. That said, we Americans are quite wasteful, and use excessive amounts of electricity. We’re also running out of fossil fuels, and if we burned every fossil fuel left within the Earth, we would turn our planet into an uninhabitable wasteland. We need to get used to conserving. I don’t like paying $300 electric bills, but I do it when I must because I must, and we cut back where we can when we can. I believe that partisan bickering is holding our country back and preventing us from being able to actually move forward. Most humans have some ability to be logical, rational, and reasonable, but unfortunately most of those people don’t get elected into office. From a liberal point of view, I see most conservatives as knee-jerk reactionaries who simply fight against new ideas rather than offer reasonable alternatives. There must be some common ground and there must be some compromise, else we will quite literally have no future.

Just in case my comment was confusing: I dislike paying a lot for energy, but I do it when I must and I’d rather pay a lot for clean energy than for coal. I’d much rather build an earth-home out of hempcrete and conserve more energy but that’s not yet a feasible financial option.

Now hold on a second. You finish you comment by calling conservatives “knee-jerk reactionaries who simply fight against new ideas rather than offer reasonable alternatives” This company is not trying t say “just burn my dirty coal,” they are offering to install pollution controls on their dime. This would also save the pollution created by transporting coal from Wyoming to Illinois and from Illinois to other parts for the world were it is probably burned without these pollution controls. You also state with absolute conviction that you have always been against coal but finish with “There must be some common ground and there must be some compromise.” Perhaps it is you and the rest of the left that are knee-jerk reactionaries and don’t recognize compromise when you see it.

No matter how you try to clean up the smokestacks coal still comes out of strip mines.

Strip mines expose the earth to toxic chemicals locked deep underground and expose the environment to leaching toxins for thousands of years. Strip mines destroy the very land and topsoils that sustain life, and require tens of thousands of years to replace, and exposing the land to erosion and leaching.

Even if you keep the smoke from going into the air, you still produce mountains of soot, ash and creosote that need to be disposed of that kill everything they touch. In older days, coal cinders and ashes were spread on road and alleyways to control weed growth—-the ashes killed everything they came into contact with. Creosote(tar like sludge that crystalizes inside chimneys) is so toxic—nothing can live on it. It was spread on telephone poles, railroad ties, and wharf pilings to prevent insects from damaging them—-which worked for decades—all the time spreading toxic heavy metals and other chemicals from the burning coal far and wide into the environment. This billionaire’s plan would do absolutely nothing to change either of these situations—-it is meant purely and solely to keep his billions rolling in.

And this does not even get into acids leaching into and the changing of the coarse of water sheds by deep mining, strip mining and mountaintop removal(the worst).

We do not need coal or nuclear—-we have better ways of providing the energy we need without the danger and risks.

Not once did I state that Cline is just trying to get his coal burned despite it being dirty, nor did I say that what he is trying to do is in any way wrong. I’m sorry if my comment was not clear enough for you to understand, but I intended for it to be obvious that compromise like this IS important, as long as it is truly a more ecologically sound solution.

“We do not need coal or nuclear—-we have better ways of providing the energy we need without the danger and risks.”

Really? Name one source without risks or other problems. Now name one source that’s economically viable with the technology of the next 20 years.

Hydro: Changes micro-climates, facilitates earthquakes, and has the potential to drown thousands (Banqiao killed at least 26000 directly with a total over 200000 including famine, even St. Francis Dam in the US ended up killing over 600)

Solar: Aside from needing ten times more capacity than we currently have (of everything put together), it would require about 30 years worth of electricity to produce. Then we have the issue of doped silicon recycling, which is currently more impossible than nuclear waste management. Not to mention the chemicals needed to produce that scale would produce enough poisonous materials to kill everyone on earth millions of times over.

Wind: There just isn’t enough land close to the source to produce the electricity needed. That means more cost making HVDC lines. Wind farms also cause radar malfunctions and kill birds, as well as affecting other animals and insects.

Gas: Likely the best option for the short term, but prices would quickly rise and sources in protected areas would be needed. Any large mining failures could result in huge greenhouse gas releases.